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Client Base

Client Base

I was just wondering what sort of price do you pay for someone else's clients they are wanting to offload?

Any help on the subject or indication to value would be appreciated.

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21st Jul 2012 18:08

1 ish times GRF

Over many years now the price tends to revolve around 1 X Gross Recurring Fees, maybe with a span of .75 to 1.25. The key part is judging what the core recurring fees are for each client, which might be significantly different to the fees actually charged in say the past year.

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21st Jul 2012 19:04

As I always say...

...something is only worth what someone else will pay for it.

However, Paul is right, the general market rate for accountancy practices are 0.75-1.25 x GRF with clawback and uplifts over the life of the deal period (typically 3 years)

Don't forget the working capital requirement if you are buying, which is typically 50% of the GRF value.

Steve

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